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MoviePass ran out of money Thursday, couldn't afford to pay for customers' tickets

Parent company borrows $5 million

Posted: 10:01 AM, Jul 27, 2018

Updated:2018-07-27 16:01:18Z

By:
CNN

MoviePass is on life support.

Helios and Matheson, the parent company of the popular movie subscription service, said that it had a service outage on Thursday because it couldn't afford to pay for movie tickets. The company borrowed $5 million in cash Friday to pay its merchant and fulfillment processors, according to a regulatory filing
.

Helios and Matheson missed a payment to one of its fulfillment processors, and that contractor temporarily refused to process payments for MoviePass.

Some customers complained on social media Thursday that they couldn't use their MoviePass accounts to purchase movie tickets at theaters.

The company hasn't said whether MoviePass has resumed operation. But in a tweet late Thursday, MoviePass said that it recommended that users wait for a resolution or use e-ticketing, which it said had not been affected.

Stock in Helios and Matheson, meanwhile, tanked Friday from nearly $7 at market open to $3.58 by mid-morning.

The company approved a reverse stock split earlier this week to boost the price from 8 cents to $21 in an effort to keep it from falling off the Nasdaq stock exchange.

The price has been in freefall ever since. If valued at its pre-split amount, Friday's price would be equivalent to about 1.5 cents.